SACRAMENTO METROPOLITAN AIR QUALITY MANAGEMENT DISTRICT

RULE 205 COMMUNITY BANK AND PRIORITY RESERVE BANK
Adopted 11-03-94
(Amended 8-1-96, 9-5-96, 3-6-97, 8-7-97, 7-23-98, 4-27-00, 8-24-00)

INDEX


100 GENERAL

    101 PURPOSE
    102 APPLICABLE REQUIREMENTS
    103 SEVERABILITY


200 DEFINITIONS

    201 ADJUSTMENT
    202 COMMUNITY BANK
    203 ENVIRONMENTAL CLEANUP OPERATION
    204 ESSENTIAL PUBLIC SERVICES ACCOUNT
    205 LOCAL REUSE AUTHORITY
    206 MILITARY BASE
    207 MILITARY BASE ACCOUNT
    208 PRIORITY RESERVE BANK
    209 REUSE
    210 SMALL BUSINESS
    211 SURPLUS EMISSION REDUCTION CREDITS


300 STANDARDS

    301 CRITERIA
    302 ESSENTIAL PUBLIC SERVICES ACCOUNT
    303 MILITARY BASE ACCOUNT
    304 COMMUNITY BANK
    305 ALLOCATION
    306 TRANSFER BETWEEN BANKS
    307 DISBURSEMENT
    308 ESSENTIAL PUBLIC SERVICES ACCOUNT PRIORITIZATION
    309 MILITARY BASE ACCOUNT APPROVAL PROCESS
    310 COMMUNITY BANK LOAN PRIORITIZATION
    311 LOAN RATES
    312 COMMUNITY BANK OR PRIORITY RESERVE BANK RENEWAL FEE
    313 RESERVING ESSENTIAL PUBLIC SERVICES ACCOUNT CREDITS
    314 TRANSFERS
    315 RETURNS
    316 SUSPENSION
    317 COMMUNITY BANK REVENUE DISBURSEMENT


400 ADMINISTRATIVE REQUIREMENTS

    401 CALCULATION PROCEDURES
    402 EMISSION REDUCTION CREDITS
    403 NOTIFICATION OF COMMUNITY BANK OR PRIORITY RESERVE BANK RENEWAL FEE
    404 NOTIFICATION OF INITIAL LOAN RATE FEE
    405 LOAN INITIATION DATE


500 MONITORING AND RECORDS

    501 RECORD KEEPING




 100 GENERAL
 101  PURPOSE: The Community Bank and the Priority Reserve Bank are established within the emission reduction Register pursuant to Rule 204, EMISSION REDUCTION CREDITS. The Priority Reserve Bank is established for the purpose of providing loans of emission reduction credits for use as offsets for new or modified stationary sources that are essential public services, or use or reuse of a military base. The Priority Reserve Bank also may be used for the purpose of providing loans of emission reduction credits to comply with rules specified in Section 102.4, a conformity determination pursuant to Rule 104, General Conformity or mitigation under the California Environmental Quality Act (CEQA). The Community Bank is established for the purpose of providing loans of emission reduction credits to comply with specified prohibitory rules, New Source Review, a conformity determination pursuant to Rule 104, General Conformity or for use as mitigation under either CEQA or a functionally equivalent program pursuant to Public Resources Code Section 21080.5.
 102  APPLICABLE REQUIREMENTS:
  102.2  Disbursement of emission reduction credit loans from the Essential Public Services Account shall be available, to the extent allowed pursuant to Section 305, to publicly owned or non-profit essential public services. Disbursement of emission reduction credit loans shall not be provided for on-site power generation or for emissions units not necessary to provide or maintain public health and safety.
Disbursement of emission reduction credit loans from the Essential Public Services Account for nitrogen oxide credits shall not be provided for those emissions resulting from a landfill gas control or processing system which are in excess of those emissions which would have resulted from a landfill gas control or processing system with a nitrogen oxide emission rate of 0.06 lb/mmBTU.
 
  102.3  Disbursement of emission reduction credit loans from the Military Base Account shall be available, to the extent allowed pursuant to Section 305, for use or reuse at a military base. 
  102.4 

Disbursement of emission reduction credit loans from the Community Bank or Priority Reserve Bank can be used for compliance with the following prohibitory rules:

  1. Rule 411, BOILER NOX,
  2. Rule 450, GRAPHIC ARTS OPERATIONS for compliance timelines that are in effect after March 6, 1997,
  3. Rule 451, SURFACE COATING OF MISCELLANEOUS METAL PARTS AND PRODUCTS for compliance timelines that are in effect after March 6, 1997,
  4. Rule 452, CAN COATING,
  5. Rule 456, AEROSPACE ASSEMBLY AND COMPONENT COATING OPERATIONS,
  6. Rule 459, AUTOMOTIVE, TRUCK AND HEAVY EQUIPMENT REFINISHING OPERATIONS,
  7. Rule 460, ADHESIVES,
  8. Rule 463, WOOD PRODUCTS COATINGS,
  9. Rule 465, POLYESTER RESIN OPERATIONS, or
  10. Rule 464, ORGANIC CHEMICAL MANUFACTURING OPERATIONS, Section 305 and Section 306, for wastewater liquid transfer. 
  102.5 

Disbursement of emission reduction credit loans from the Community Bank or Priority Reserve Bank shall not be used for the following:

  1. Compliance with Best Available Control Technology requirements pursuant to Rule 202, NEW SOURCE REVIEW;
  2. Compliance with Maximum Available Control Technology standards as described in 40 CFR Part 63;
  3. Compliance with National Emissions Standards for Hazardous Air Pollutants as described in 40 CFR Part 61;
  4. Compliance with New Source Performance Standards as described in 40 CFR Part 60;
  5. Compliance with toxic air contaminant regulations as described in Health and Safety Code Section 39665 and seq.
  6. To avoid penalties or enforcement actions by obtaining credits after the fact of noncompliance;
  7. For netting out of NSR or PSD requirements pursuant to Rule 202, NEW SOURCE REVIEW and Rule 203, PREVENTION OF SIGNIFICANT DETERIORATION; or
  8. To meet requirements for motor vehicle emissions standards, reformulated gasoline, clean fueled fleets, employer trip reduction programs, or vehicle inspection and maintenance programs as described in Title II of the Clean Air Act and Division 26, Part 5 of the Health and Safety Code 
  102.6  Disbursement of emission reduction credit loans from the Community Bank shall not be used for essential public services, or use or reuse of a military base.

[Note: Rules 464, 460, 463, and 465 have not been yet approved by the United States Environmental Protection Agency into the State Implementation Plan (SIP). Approval of this rule into the SIP does not constitute automatic SIP approval of these rules.] 
103  SEVERABILITY: If a court of competent jurisdiction issues an order that any provision of this rule is invalid, it is the intent of the Board of Directors of the District that other provisions of this rule remain in full force and affect, to the extent allowed by law. 
200 DEFINITIONS: Unless otherwise defined below, the terms used in this rule are defined in Rule 202, NEW SOURCE REVIEW, and Rule 204, EMISSIONS REDUCTION CREDITS. 
201  ADJUSTMENT: Adjustment for purposes of this rule includes the emission reductions resulting from the conversion of emission reductions to emission reduction credits, pursuant to Rule 204, EMISSION REDUCTION CREDITS. 
202  COMMUNITY BANK: A depository of certified emission reduction credits available to public and private entities for compliance with Rules and Regulations specified in Section 102.4, or offset requirements in Rule 202, NEW SOURCE REVIEW, for use for a conformity determination pursuant to Rule 104, General Conformity or for use as mitigation under the California Environmental Quality Act or a functionally equivalent program through the loan of emission reduction credits. 
203  ENVIRONMENTAL CLEANUP OPERATION: Operation to remove environmental contaminants from soil or groundwater which has been mandated by the Regional Water Quality Control Board, the Department of Toxic Substances Control, the U.S. Environmental Protection Agency or any other local, state or federal law, rule or regulation. 
204  ESSENTIAL PUBLIC SERVICES ACCOUNT: A depository of certified emission reduction credits for loan to applicable essential public services for use as offsets pursuant to Rule 202, NEW SOURCE REVIEW, for use for a conformity determination pursuant to Rule 104, GENERAL CONFORMITY, for use as mitigation under the California Environmental Quality Act or a functionally equivalent program, or for use for compliance with rules specified in Section 102.4. Except as excluded in Section 102.1 and 102.2, the following sources shall be considered essential public services.  
   204.1 Sewage treatment operations which are publicly owned and operated consistent with the approved General Plan. 
   204.2 Prison, jail, correctional facility.
   204.3 Police or fire fighting facility.
   204.4 School or hospital.
   204.5 Solid waste management systems, including landfill gas control or processing systems.
   204.6 Water delivery operations.
   204.7 Environmental cleanup operations.
 205 LOCAL REUSE AUTHORITY: The local community entity established by state or local government as the entity responsible for creating the redevelopment plan for a military base and for directing implementation of the plan.
 206 MILITARY BASE: Any United States military facility within the District including those closed or downsized pursuant to federal law. 
 207 MILITARY BASE ACCOUNT: A depository of certified emission reduction credits for loan to applicable sources for use as an offset pursuant to Rule 202, NEW SOURCE REVIEW, for use for a conformity determination pursuant to Rule 104, GENERAL CONFORMITY, for use as mitigation under the California Environmental Quality Act or a functionally equivalent program, or for use for compliance with rules specified in Section 102.4.
 208 PRIORITY RESERVE BANK: A depository of certified emission reduction credits in the Essential Public Services Account and the Military Base Account for loan to applicable sources for use as offsets pursuant to Rule 202, NEW SOURCE REVIEW, for use for a conformity determination pursuant to Rule 104, GENERAL CONFORMITY, for use as mitigation under the California Environmental Quality Act or a functionally equivalent program, or for use for compliance with Rules and Regulations specified in Section 102.4. 
 209 REUSE: The creation and/or support of new and existing businesses, works, jobs, or revenue-generating activities at a military base. 
 210 SMALL BUSINESS: A business entity that is independently owned and operated, does not have more than the equivalent of ten full-time employees and does not have more than $2 million in annual gross receipts. 
 211 SURPLUS EMISSION REDUCTION CREDITS: Emission reductions in excess of any emissions reductions which are: 
  211.1  required or encumbered by any laws, rules, regulations, agreements, or orders, and unless such law by its terms states that the emission reduction shall be considered surplus, or 
  211.2  attributed to a control measure noticed for workshop in the District, or proposed or contained in a State Implementation Plan, or 
  211.3  proposed or contained as mid-term measures in the District Air quality Attainment Plan for attaining the annual reductions required by the California Clean Air Act. 
300 STANDARDS 
301  CRITERIA: The Community Bank and Priority Reserve Bank shall be supported by actual emission reductions which are certified pursuant to Rule 204, EMISSION REDUCTION CREDITS.
302 ESSENTIAL PUBLIC SERVICES ACCOUNT: Support for the Essential Public Services Account shall include, but not be limited to:
  302.1 The adjustment of all emission reductions as provided in Rule 204, EMISSION REDUCTION CREDITS and Rule 206, MOBILE AND TRANSPORTATION SOURCE EMISSION REDUCTION CREDITS except for the adjustment of emission reductions from a military bases or from emission reductions realized pursuant to Section 317. 
  302.2  Shutdowns or modifications of stationary sources or emission units not claimed for emission reduction credits by the facility within the specified timeframes as provided in Rule 204, EMISSION REDUCTION CREDITS except for shutdowns from a military base.
  302.3  In addition, unused emission reduction credits from a previous calendar quarter may be transferred from the Military Base Account to the Essential Public Services Account if the Board of Directors of the District, with the recommendation of the Air Pollution Control Officer, determines there is a need by sources described in Section 205. 
 303 MILITARY BASE ACCOUNT: Support for the Military Base Account shall include, but not be limited to: 
  303.1  The adjustment of emission reductions from a military base as provided in Rule 204, EMISSION REDUCTION CREDITS and Rule 206, MOBILE AND TRANSPORTATION SOURCE EMISSION REDUCTION CREDITS. 
  303.2  Shutdowns of emission units not claimed for emission reduction credits by a military base within the specified timeframes as provided in Rule 204, EMISSION REDUCTION CREDITS, except for sixty percent of the reactive organic compound and nitrogen oxides emission reduction credits from the shutdown of B-52 Bomber aircraft flight operations at Mather Air Force Base. 
  303.3  In addition, unused emission reduction credits from a previous calendar quarter, may be transferred from the Essential Public Services Account to the Military Base Account if the Board of Directors of the District, with the recommendation of the Air Pollution Control Officer, determines there is a need for the purposes described in Sections 203 and 209. 
 304 COMMUNITY BANK: Support for the Community Bank shall include, but not be limited to:
   304.1 Initially, sixty percent of the reactive organic compound and nitrogen oxides emission reductions realized by the shutdown of B-52 Bomber aircraft flight operations at Mather Air Force Base.
   304.2 Emission reduction credits realized through activities initiated by disbursement of bank proceeds to innovative emission reduction programs selected by the District Board of Directors pursuant to Section 317. These emission reductions shall be certified pursuant to Rule 204, EMISSION REDUCTION CREDITS. 
 305 ALLOCATION: 
   305.1 PRIORITY RESERVE BANK: On or before December 31st of each calendar year for emission reduction credits deposited during the calendar year, the Air Pollution Control Officer shall determine the amount of emission reduction credits available for withdrawal from the accounts in the Priority Reserve Bank for the upcoming year. Additional emission reduction credits generated pursuant to Sections 302.1 and 303.1 not included in the yearly determination may be added, if the Air Pollution Control Officer determines there is a need, to the previously established quarterly allocations. Allocated emissions reduction credits shall be made available on the first Wednesday of each calendar quarter. The amount available for loan funding from the Priority Reserve Bank shall never exceed the emission reduction credits in the Essential Public Services Account and the Military Base Account.
   305.2

COMMUNITY BANK: Credits shall be allocated as follows:

  1. There will be an initial total of 300 tons per year of reactive organic compound and 45.6 tons per year of nitrogen oxides credit available for loan funding in the Community Bank upon adoption of this rule. The credit shall be allocated as follows:

    1. Initially a total of 150 tons per year of reactive organic compound and 45.6 tons per year of nitrogen oxides credits shall be available for withdrawal. The reactive organic compound credits shall be allocated on a quarterly basis as 37,500 pounds per quarter through September 1998. The nitrogen oxides credits shall be allocated on a quarterly basis as 11,400 pounds per quarter through September 1998. Allocated emissions reduction credits shall be made available on the first Wednesday of each calendar quarter. The District Board of Directors, with the recommendation of the Air Pollution Control Officer, may adjust the quarterly allocation to not exceed 150 tons per year of reactive organic compounds and 45.6 tons per year of nitrogen oxides through September 1998.

    2. Beginning October 1998 through September 2002, the additional 150 tons per year of reactive organic compound emissions shall be allocated on a quarterly basis as 18,750 pounds per quarter. Allocated emissions reduction credits shall be made available on the first Wednesday of each calendar quarter.

  2. In addition, on or before December 31st of each calendar year for emission reduction credits deposited during the calendar year to the Community Bank pursuant to Section 317, the Air Pollution Control Officer shall determine the amount of emission reduction credits available for withdrawal from the Community Bank for the upcoming year. Additional emission reduction credits, pursuant to Section 317, not included in the yearly determination may be added, if the Air Pollution Control Officer determines there is a need, to the previously established quarterly allocations. Allocated emissions reduction credits shall be made available on the first Wednesday of each calendar quarter. 
 306 TRANSFER BETWEEN BANKS: Unused emission reduction credits from a previous calendar quarter may be transferred between the Priority Reserve Bank and the Community Bank if the District Board of Directors, with the recommendation of the Air Pollution Control Officer, determines there is a need by sources requesting loans of emission credits from the Priority Reserve Bank or the Community Bank. 
 307 DISBURSEMENT: A loan of emission reduction credits from the Priority Reserve Bank or the Community Bank shall be granted with the issuance of a final action on an Authority to Construct or the issuance of a Permit to Operate subsequent to a Change of Ownership application, pursuant to Rule 201, GENERAL PERMIT REQUIREMENTS and/or Rule 202, NEW SOURCE REVIEW or Rule 107, ALTERNATIVE COMPLIANCE, or for use for a conformity determination pursuant to Rule 104, GENERAL CONFORMITY or mitigation under CEQA, and upon payment of a fee and the loan rate pursuant to Section 311 and 404. 
  307.1  Legal Title to the emission reduction credits borrowed from the Priority Reserve Bank or the Community Bank remains with the District. A certificate of ownership will not be issued for emission reductions loaned from the Priority Reserve Bank or the Community Bank. 
  307.2  A borrower of emission reductions from the Priority Reserve Bank or the Community Bank will be issued an emission reduction credits Register account number and the borrowed emission reduction credits will be credited to that account. 
  307.3  Upon issuance of a final action on an Authority to Construct or the issuance of a Permit to Operate subsequent to a Change of Ownership application, the emission reduction credits in the borrowers account will be credited to the permit.
  307.4  The District will enter the permit number, the date, and the amount of emission reductions credited from the borrowers account on the Authority to Construct and/or Permit to Operate and in the borrowers account history. 
  307.5 Disbursement of emission reduction credits from source shutdowns and curtailments shall be in accordance with the most current United States Environmental Protection Agency Emissions Trading Policy. [Note: EPA has determined that, based on Section 403(f) of the Federal Clean Air Act, the emission reduction credits borrowed from the Priority Reserve Bank or the Community Bank do not constitute property rights.]
 308 ESSENTIAL PUBLIC SERVICES ACCOUNT PRIORITIZATION: Priority shall be given to applications to the Essential Public Services Account with the earliest date an application for an Authority to Construct is deemed complete. The Board of Directors of the District may determine that a specific project shall be given priority for access to the Essential Public Services Account based on public health or safety, regardless of the application submittal date. 
 309 MILITARY BASE ACCOUNT APPROVAL PROCESS: Priority shall be given to applications to the Military Base Account as determined by the Board of Directors of the District, with the recommendation of the Air Pollution Control Officer. A loan of emission reduction credits from the Military Base Account must be approved by the District Board of Directors. Only the local reuse authority for a closing military base within the District, or any other person proposing a reuse at a Military Base, or a federal government entity operating a military base within the District, may apply for use of credits from the Military Base Account. 
310 COMMUNITY BANK LOAN PRIORITIZATION: All loan applications in the bank funding cycle will be funded subject to the quarterly funding cap. Should the total of loan requests exceed the quarterly funding cap, all loan applications in the funding cycle shall be prioritized according to the prioritization scheme outlined below. Unfunded loan applications will be held over to the next funding cycle. 
   310.1

FIRST PRIORITY LOAN RANK: Applications for loans to meet requirements of prohibitory rules identified in section 102.1 shall be placed in the first priority ranking for funding. Applications within the first priority ranking shall be further prioritized as follows:

  1. SMALL BUSINESS: Applications submitted by small business entities shall be funded first.
  2. SMALL LOANS: Applications in the first priority ranking shall be further prioritized according to total emission credits requested, ranked from smaller amounts to larger amounts. 
   310.2

SECOND PRIORITY LOAN RANK: Applications for loans to meet offset requirements of Rule 202, NEW SOURCE REVIEW, shall be placed in the second priority ranking. Applications within the second priority ranking shall be further prioritized as follows:

  1. SMALL BUSINESS: Applications submitted by small business entities shall be funded first.
  2. SMALL LOANS: Applications in the second priority ranking shall be further prioritized according to total emission credits requested, ranked from smaller amounts to larger amounts.
   310.3 THIRD PRIORITY LOAN RANK: Applications for loans to satisfy conformity pursuant to Rule 104, General Conformity or CEQA mitigation requirements shall be placed in the third priority ranking. Applications in the third priority ranking shall be further prioritized according to total emission credits requested, ranked from smaller amounts to larger amounts. 
 311 LOAN RATES
   311.1 BASIC RATE: The base loan rate shall be the two-year weighted average market rate of each pollutant for the Sacramento Federal Non-Attainment Area for Ozone plus an administrative fee for processing the loan applications. The base rate shall be established in March of each year for the following calendar year. If there have been no representative offset transactions in a given year, then the two-year weighted average market rate shall be based on the most recent continuous two year period where there are representative offset transactions. The base rate must be approved by the District Board of Directors with the recommendation of the Air Pollution Control Officer. 
   311.2 BASIC RATE TERM: The base rate term shall be for 30 years. 
   311.3

SHORT TERM RATE: Rates for loans with a term of 30 years or less shall be calculated as follows:

 312 COMMUNITY BANK OR PRIORITY RESERVE BANK RENEWAL FEE: Any person who requests to withdraw emission reduction credits pursuant to this rule shall pay an annual renewal fee to administer the rule. The annual renewal fee assessed shall be $856. In March of each year, the Air Pollution Control Officer shall submit to the District's Board of Directors cost analysis which contains a recommendation for the new annual renewal fee. The District's Board of Directors shall review the cost analysis and shall set the new fee amount. 
 313 RESERVING ESSENTIAL PUBLIC SERVICES ACCOUNT CREDITS: Sources may, if the Air Pollution Control Officer determines a need, reserve Essential Public Services Account credits for up to three years to allow multi-year projects to be planned. The sum of such credits shall amount to no more than 25 percent of each calendar quarter allocation for the Essential Public Services Account for those three years. 
 314 TRANSFERS: The loan of Priority Reserve Bank or the Community Bank credits shall not be transferable, whether by operation of law or otherwise, from one person to another, from one location to another, or from one emissions unit to another. 
 315 RETURNS: The emission reductions calculated pursuant to Section 403 of Rule 107, ALTERNATIVE COMPLIANCE or pursuant to Section 302 of Rule 202, NEW SOURCE REVIEW for the emissions units using emission reduction credits from the Community Bank or Priority Reserve Bank shall be returned to the Essential Public Services, Military Base Account or the Community Bank under any of the following conditions as long as at the time of return the original emission reduction credits can be determined to be surplus emission reduction credits: 
   315.1 Construction is not started within two years of date of granting of the loan. 
   315.2 Revocation or voluntary surrender of Authority to Construct or Permit to Operate. 
   315.3 Emission reduction credits are issued to the stationary source pursuant to Rule 204, EMISSION REDUCTION CREDITS. 
 316 SUSPENSION: Except as provided in Section 315, a loan of emission reduction credits shall exist for the life of the emissions unit using such credits or for the loan life, whichever is shorter.  
   316.1

If the total emission reduction credits available for loan for any specific pollutant from the Community Bank and Priority Reserve Bank reaches or falls below the following amounts then a suspension on all loans shall be imposed for the specific pollutant.

As soon as possible but no later than 60 days from a suspension being imposed pursuant to Section 316.1, the Air Pollution Control Officer shall present the District Board of Directors with options on continuing or lifting the suspension. The Air Pollution Control Officer shall publish in at least one newspaper of general circulation in the District a notice of the date of the meeting of the District Board of Directors to consider what further action should be taken. The notice shall be published at least 30 days, when possible, but not less than 7 days prior to the meeting. The suspension shall remain in place until lifted or modified by the District Board of Directors.  

   316.2 Notwithstanding Section 316.1, if the District Board of Directors determines that additional emission reductions within the District are necessary, a suspension on loans may be imposed. Prior to the Board of Directors issuing a suspension, the Air Pollution Control Officer shall publish in at least one newspaper of general circulation in the District a notice of the date of the meeting of the District Board of Directors to consider such actions. The notice shall be published at least 30 days prior to the meeting. The suspension shall be lifted upon determination that additional emission reductions within the District are not necessary by the District Board of Directors. 
  316.3  Starting with the 1999 emission inventory and every three years after that the District shall prepare a summary of District control measures listed in the table in Section 316.5(a) included in the Sacramento Area Regional Ozone Attainment Plan. 
  316.4  The summary shall include the actual emission reductions realized for each control strategy and the total reactive organic compound emission reductions realized for the control measures. The summary shall be completed by July 1, 2000 and every three years thereafter. 
  316.5 

A specific suspension shall be imposed on the loaning of the B-52 credits that went into initially funding the Community Bank, pursuant to Section 304.1, if the following condition occurs:

  1. If the actual emission reductions realized is less than the total emission reductions in the following table:

  2. The suspension resulting from the condition in Section 316.5 will be lifted if and when the total emission reductions in the table Section 316.5(a) are shown to have occurred. 
 317 COMMUNITY BANK REVENUE DISBURSEMENT: Net proceeds from emission reduction credit loans from the Community Bank and Priority Reserve Bank shall only be used to fund innovative emission reduction programs. Emission reductions realized from programs so funded shall be deposited in the Community Bank. 
  317.1  TARGET PROGRAMS: By April of each year the District Board of Directors, with a recommendation from the Air Pollution Control Officer, based on the availability of proceeds from Community and Priority Reserve Bank revenues, shall identify preferred emission credit generating programs for funding.
  317.2  REQUEST FOR PROPOSALS: By June of each year, based on the availability of proceeds from Community and Priority Reserve Bank revenues, staff shall prepare and publish a request for proposal(s) (RFP) to solicit for the development or continuation of innovative emission reduction programs. If the available proceeds from Community and Priority Reserve Bank revenues is less than $50,000, then the proceeds may be made available for use in the following year RFP cycle. 
  317.3  RANKING PROPOSALS: The selection criteria shall include, but not be limited to, cost, emission reduction potential, technical feasibility, and confidence. At the close of each RFP solicitation, staff will evaluate all proposals received and reject proposals not meeting the minimum selection criteria.
  317.4  SELECTION OF PROGRAMS FOR FUNDING: By October of each year the Air Pollution Control Officer will recommend to the Board of Directors, based on the selection criteria identified in Section 317.3 above, a ranking of emission reduction programs selected for funding. The Board of Directors shall accept or reject the list in toto. 
   317.5 EMERGENCY SELECTION OF PROGRAMS FOR FUNDING: Notwithstanding Sections 317.1, 317.2, 317.3 and 317.4, the District Board of Directors, with a recommendation from the Air Pollution Control Officer, may designate net proceeds from emission reduction credit loans to emission reduction programs that meet the actual emission reduction criteria of Rule 204, EMISSION REDUCTION CREDITS. 
   317.6 INCENTIVE PROGRAM: In the event Community and Priority Reserve Bank revenues available for program funding exceeds the recommended list of emission reduction programs accepted by the Board of Directors, the unused funding may be used to fund mobile source incentive programs identified in the latest State Implementation Plan or may be made available for use in the following year RFP cycle. 
400 ADMINISTRATIVE REQUIREMENTS
 401 CALCULATION PROCEDURES: Emission reduction credits deposited in the Priority Reserve Bank or the Community Bank shall be quantified pursuant to calculation procedures specified in Rule 204, EMISSION REDUCTION CREDITS. 
 402 EMISSION REDUCTION CREDITS: Any stationary source which holds emission reduction credits for the affected pollutant requested in an application for Authority to Construct must first use those credits prior to being allowed access to the Essential Public Services, Military Base Account or the Community Bank. 
 403 NOTIFICATION OF COMMUNITY BANK OR PRIORITY RESERVE BANK RENEWAL FEE: On the renewal date of the loan, the loan requestor will be notified by mail of the fee due and payable, pursuant to Section 312, and the date the fee is due. If the fee is not paid by the specified due date, the fee shall be increased by one half the amount and the loan requestor shall be notified by mail of the increased fee. If the increased fee is not paid within 30 days after notice the loan will be canceled and the loan requestor will be notified by mail. A canceled loan may be reinstated by payment of the applicable fee plus fee increases. The stationary source may be out of compliance if the emissions loan is canceled and the stationary source continues to operate under the conditions of the emissions loan. 
 404 NOTIFICATION OF INITIAL LOAN RATE FEE: On the date the emission reduction credits are proposed to be disbursed from the Community Bank and Priority Reserve Bank, the loan requestor will be notified by mail of the loan fee due and payable, pursuant to Section 311, and the date the fee is due. If the loan fee is not paid within 30 days of the notification, the loan fee shall be increased by twenty-five percent and the loan requestor shall be notified by mail of the increased fee. If the increased fee is not paid within 30 days after notice, the loan request will be canceled and the loan requestor will be notified by mail. After a loan request has been canceled, the applicant will not be able to request a loan until the following funding cycle. 
405  LOAN INITIATION DATE: Upon payment of the initial loan rate fee, the loan shall be effective the first day of that calendar quarter. 
500 MONITORING AND RECORDS 
501  RECORDKEEPING 
  501.1  Each stationary source shall maintain a cumulative total of emission credits on loan from the Priority Reserve Bank or the Community Bank.  
  501.2  The District shall maintain records of the source and amount of emission reductions obtained for deposit in the Priority Reserve Bank or the Community Bank, loans of these credits to applicants and disbursements of Community